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Fuel subsidy removal : FG to pay workers 2 special allowances

The National Economic Council (NEC) Thursday considered two forms of palliatives for workers and vulnerable persons to cushion the effects of petrol subsidy removal.

The proposals are "living cost allowance" of over N702 billion and "petroleum allowance" ranging from N23.5 billion to N45 billion per month.

The council explained after its more than five and a half hours meeting presided over by Vice President Kashim Shettima that the N702 billion was recommended by the National Salaries, Incomes and Wages Commission based on Labour's demands.

Before the meeting, President Bola Tinubu, who inaugurated the NEC, charged its members to work with his administration to revive the economic fortunes of Nigeria and its citizens.

The NEC is a major organ of the Executive made up of the 36 governors, ministers in charge of finance and the economy, and the Central Bank of Nigeria (CBN) governor, among others.

Tinubu had in his May 29 inauguration speech announced that the era of subsidy was over.

The development led to a threat by Labour to embark on a strike to compel the government to rethink the policy.

After a series of horse trading, Labour suspended the planned strike after the Federal Government promised to work out measures to minimise the impact of the policy on the masses, especially workers. The meeting between the Federal Government and the Labour centres will resume on Monday.

Bauchi State Governor Bala Mohammed, who briefed reporters after the NEC meeting, explained that the two forms of allowances were a part of the numerous palliatives in the pipeline.

Mohammed said NEC also discussed the possibility of obtaining funds from the World Bank and its London partners to implement the Federal Government's Compressed Natural Gas (CNG) programme as a strategy to reduce petrol costs.

NEC, according to him, constituted a committee to work out modalities for the deployment of the N702 billion and the N23.5 billion/ N45 billion monthly petroleum allowance.

The committee, headed by Kebbi State Governor Nasir Idris, has two weeks to complete its assignment.

Mohammed was joined by four of his colleagues – Dapo Abiodun (Ogun), Dikko Radda (Katsina), Alex Otti (Abia) and Yahaya Bello (Kogi).

The Bauchi State governor said: "Various scenarios were given by the presenter on the issue of salaries and wages and this N702 billion plus was suggested as an allowance for the cost of living adjustment allowance by Labour and the other one is a petroleum allowance.

"The governor of Ogun has told you that there are other allowances here and there, but with regards to Labour, these are some of the few allowances that they have suggested.

"That of petroleum, they said, will range from N23.5 billion to N45 billion per month, depending on what is in the kitty for distribution or for sharing.

"So, the N702 billion is a suggested sum for Labour to cushion the effect on workers on a new allowance that will be tagged 'cost of living adjustment allowance'.

"The council looked at all the issues, including the challenges and problems holistically and then set up a small committee of the council to review and come up with a term of reference to organised areas, specifically where these palliatives can come and how they will be dispensed to alleviate the problems of workers and other vulnerable groups."

The committee comprises the Governor of Kebbi as chairman; Charles Soludo (Anambra) representing Southeast; Hycinth Alia (Benue) representing Northcentral; Uba Sani (Kaduna) representing Northwest; Mohammed, representing Northeast; Bassey Otu (Cross River), representing Southsouth and Seyi Makinde (Oyo) representing the Southwest.

Also on the committee are representatives of the Budget Office of the Federation, CBN, Office of the Attorney-General of the Federation, Nigerian National Petroleum Company Limited, Trade Union Congress (TUC) and Nigeria Labour Congress (NLC).

Mohammed said they must recommend to NEC within two weeks "a holistic" approach to alleviating the post-subsidy removal hardship on Nigerians.

Abiodun said oil sector players, represented by the officials of the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), suggested how to reduce the price of petrol.

According to him, the body urged the government to reduce the taxes being collected by the Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency(NIMASA) and other government agencies on petroleum products.

The governor added that the Group Chief Executive Officer of the NNPCL, Mele Kyari, reported that the company noticed that with the subsidy removal, the cost of fuel in the neighbouring countries had risen.

He noted that the neighbouring countries have been relying on subsidised fuel from Nigeria.

Abiodun said the price of fuel would drop by N40 when local refineries begin to work at full capacity.

Otti said NEC looked at the issue of providing legislative support to local automotive manufacturers.

While noting that the impact of subsidy removal has increased prices, he said the presentations dwelt on ways to solve problem costs and reduce shock.

NEC also deliberated on the need to alleviate the suffering caused by the 2022 flood disaster in parts of the country through the timely release of funds as recommended by its various committees.

Bello, who addressed the issue, said NEC frowned at the delay by many of the states affected by the disaster to forward their submissions to its secretariat.

He said that given the threat of flood this year, NEC resolved that all states should make a comprehensive submission by next week.




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